Upstart Holdings, the AI-driven lending platform, has secured a 12-month forward-flow arrangement under which funds managed by Wafra, a New York-based global alternative investment manager, will purchase up to $200 million of assets originated through Upstart's auto finance platform.
The agreement, announced on 20 February in San Mateo, is the first between the two companies and represents Upstart's inaugural auto finance forward-flow programme.
A forward-flow arrangement is a commitment by an investor to purchase loans on an ongoing basis as they are originated, providing the lender with a predictable and recurring source of capital.
Upstart said the deal supports its ability to deliver a consistent funding platform across its auto product vertical and across a range of economic conditions.
Sanjay Datta, president and chief capital officer at Upstart, said the agreement demonstrated significant market interest in the company's maturing auto platform and would help Upstart pursue better rates and processes for auto borrowers.
Paul Steinberger, managing director at Wafra, said the firm was pleased to partner with Upstart on the programme.
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Wafra focuses on strategic partnerships, real estate, and real assets.
Upstart uses artificial intelligence to assess creditworthiness, aiming to extend lending to borrowers who may be underserved by traditional credit scoring models. The company has been expanding its auto lending vertical as it seeks to diversify beyond its core personal loans business.
The recap
- Upstart and Wafra agreed a forward-flow purchase arrangement.
- Wafra will purchase up to $200 million of auto assets.
- The agreement is a 12-month forward flow arrangement.
